Water damage in a condo: what to do, who is responsible and what does your insurance cover?

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2 min.

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When a condo sustains water damage, the question isn’t just how to clean it up. You also need to understand who should get involved, what steps to take and how your insurance can support you in the weeks ahead.

Why is water damage common in condos?

Water damage is one of the most common types of damage in condominiums, mainly because multiple units share the same building. A washing machine with faulty water supply hoses, a burst pipe, a malfunctioning dishwasher or even a water leak can affect several units quickly and simultaneously. Given the proximity of condo units to one another, an incident that occurs in one unit can impact others.

What does condo insurance cover in terms of water damage?

Condo insurance is a shared responsibility: the co-owner must have condo insurance for their private unit, and the syndicate of co-owners must maintain valid insurance to protect the building and its common areas (such as the foundation, structure, roof, hallways and elevator).

Condo insurance: Available coverage

Civil liability (mandatory)

Home insurance for condominium owners

Specified perils (recommended)
Condo insurance can also cover your personal property against certain specified risks such as fire, theft and vandalism. Everything inside your condo—including your personal belongings, furniture, appliances, sports equipment and electronics—is therefore insured under this coverage.
All risks (recommended)
This is the most comprehensive coverage, as it enhances the basic “Specified perils” coverage and gives you access to the following additional coverages:
- Improvements, that is, additions or renovations made to the standard unit since its construction and that are not included in the description of the private portions (DPP) drawn up by the syndicate of co-owners.
- Additional living expenses, such as the cost of temporary accommodation if you are displaced due to a covered loss.

💡Standard unit: Why it’s important

The standard unit (or reference unit) is the original dwelling, meaning the layout and features provided for each unit at the time of construction, before any improvements are made by a co-owner. The reference unit is insured by the syndicate of co-owners, while improvements must be insured under the co-owner’s home insurance. As a reminder, it’s important to check what’s included in the reference unit to get an idea of what you want to insure.

Additional protection against water damage (optional)
Three endorsements can be purchased separately to cover additional risks related to water entering the building from outside:
- Ground water and sewers
- Above-ground water
Infoassurance has created an infographic that provides an at-a-glance overview of potential coverage for water damage based on the various types of coverage available.

What’s covered under the syndicate of co-owners’ insurance?

The syndicate of co-owners must take all necessary measures to ensure the preservation of the entire building, in the broadest sense. As a result, their insurance covers:

The building
Common areas
Common elements
Standard units
Civil liability of the syndicate of co-owners, including its directors

In addition to maintaining appropriate insurance coverage against ordinary risks, the syndicate of co-owners has other important responsibilities in this regard, including:

Preparing and making available the description of the private portions (DPP)
Assessing the building reconstructions costs to ensure there is sufficient insurance
Having the damage to the building repaired
Creating a self-insurance fund and replenishing it when it’s used

💡Self-insurance fund: Why it’s important?

In Quebec, the syndicate of co-owners must maintain a reserve of funds (the self-insurance fund) to cover certain uninsured costs related to a loss, such as the deductible under the syndicate’s insurance policy. This deductible can easily amount to several thousand dollars, and in some cases, even more.

Important! This is different from the contingency fund, which is a reserve accumulated by the syndicate of co-owners in anticipation of future repairs to the building and its common areas. This is one of the things to consider when buying a condo.

What happens if water damage is caused by a neighbour?

It’s not always easy to understand how insurance claims work behind the scenes. If one of the co-owners is responsible for the damage, the Autorité des marchés financiers (AMF) explains that the syndicate of co-owners may have several options. For example, if it chooses to file a claim with its insurer, there are two possible outcomes:

Outcome A: The loss is covered by the insurance contract on the building. The syndicate may ask the co-owner at fault to pay the amount of the deductible specified in the syndicate’s policy and the cost of the work in excess of the insurance limits. The co-owner may then file a claim for these amounts with their own personal property insurer, which will evaluate it.

Outcome B: The loss is not covered by the building insurance contract. The syndicate will have to assume the total cost of the work. It may then claim the cost from the co-owner at fault. The co-owner may file a claim for that amount with their own personal property insurer, which will evaluate it.

Source: Excerpt from the Autorité des marchés financiers (AMF) website

What to do in case of water damage?

You have water damage in your condo. So, now what? Check out this five-step checklist to guide you through this ordeal.

Limit the damage and shut off the power if necessary.
Notify the insurance companies (for the co-owner and the syndicate of co-owners).
Speak with a claims expert.
Have the repairs done once approval has been obtained from the insurer.
Pay the deductible and the cost of the repairs using the money you get from the insurance company.

💡Water damage in your unit: The importance of communication!

If you have water damage in your unit, let the neighbours who live in the unit below you know. Also, inform the property manager or the board of directors of the circumstances surrounding the loss.

How to prevent water damage in your unit?

Thanks to technology such as smart water detectors and connected water shut-off valves, you can now detect and stop water leaks before they cause costly damage. There are several other things you can do to help you effectively prevent water damage in your condo:

Shut off your main water valve and drain the pipes if you’re away from home for a few days.
Don’t leave your dishwasher or washing machine running while you’re away.
Keep the heat on low if you go away during the winter so your pipes won’t freeze.

Nevertheless, it’s essential to have adequate insurance before misfortune strikes. Home insurance for condominium owners gives you the option of obtaining civil liability coverage and choosing the coverages best suited to your situation.

FAQ - Water damage in a condo

What should I do if I have water damage in my unit?
The first step is to act quickly to minimize the damage. If possible, shut off the water supply (for example, by turning off a faucet or the main water valve), protect your belongings and remove any items that could get damaged. Also, take photos or videos of the damage and contact your insurer right away to find out what to do next. The syndicate of co-owners should also be notified.

What if the water is from my neighbour’s unit?
If water coming from another unit causes damage to your condo, it’s important to act quickly: document the damage, notify your insurer and inform the syndicate of co-owners immediately. Even if the water came from the neighboring unit, your own home insurance may cover the damage to your condo. Insurers will then determine liability and possible remedies based on the circumstances.

What happens if I’m responsible for the water damage?
As a co-owner, you may be held liable for damage caused to your unit, to other units or to certain common areas of the building, depending on the situation. This underscores the importance of having sufficient civil liability coverage to deal with the financial consequences of a loss.

If another co-owner or the syndicate of co-owners makes a claim against you following water damage, notify your insurance company immediately. Depending on the coverage provided in your policy, your civil liability insurance may cover you for damage for which you could be held liable.

Need advice?

Don’t hesitate to contact us if you’re wanting to shop around for new home insurance. One of our insurance agents will be happy to assist you and answer all your questions.

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